After Standoff, Both Sides Can Take Credit for Victories

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By holding the budget hostage for more than three months, Gov. George E. Pataki gambled that he could pressure legislative leaders into enacting major changes in several areas of state government. But in the end, he felt the pressure as much as the legislators did, and ultimately settled today on a budget deal that gave all sidessomething to walk away with.

In an election year, legislative leaders from both parties can go back to their districts and say they successfully blocked most of the sharp cuts that Mr. Pataki had proposed for state colleges, primary and secondary education, health care and welfare.

Mr. Pataki lost on a slew of major cuts and policy changes that he sought, but managed to get an agreement on overhauling the workers' compensation system, as well as a few other issues.

Here are examples of the individual deals struck to reach a final agreement on what is now the latest state budget in New York history:

INJURED WORKERS

Mr. Pataki obtained major concessions in the debate over changing the $5 billion workers' compensation system. The deal seeks to achieve some of the biggest reductions in costs for businesses since the system was created nearly a century ago. It would require lower insurance premiums for businesses with good safety records, shield employers from certain lawsuits and require the state to establish an antifraud bureau. Officials expect the plan to cut 25 percent, or $1.3 billion, from the $5 billion in premiums that businesses pay each year. (Some critics question that figure, saying the savings are far less.)

From the start, Mr. Pataki and the Assembly Speaker, Sheldon Silver, agreed that increasing insurance premiums impeded the growth in jobs and led companies to leave the state. But the leaders disagreed on the solution. Mr. Pataki had sought an overhaul that would have included eliminating third-party suits, under which a manufacturer of defective equipment who is required to pay damages to an injured worker can turn around and sue the worker's employer to collect part of those damages. The Democrats had favored an approach that would have left the system largely intact.

In the end, Mr. Pataki pressured Mr. Silver into restricting such suits to cases in which employees suffered grave injuries like head trauma, paraplegia, quadriplegia, total deafness or blindness or the loss of a limb. But Mr. Silver did succeed in blocking most of Mr. Pataki's other proposals, including capping payments for injured workers.

WELFARE

When the Governor announced his welfare package, he promised to end the cycle of dependency that he said the welfare system had fostered. Saying he wanted to nudge people back into the work force, Mr. Pataki proposed setting time limits on benefits for the first time and cutting monthly benefits by 27 percent.

But the Legislature, led by Democrats in the Assembly, rejected that approach, saying it was an attempt to balance the budget on the backs of the poor. In the end, legislative leaders provided $55 million to insure that welfare grants would not be cut. They also blocked Mr. Pataki's plan to impose a 60-day limit for single childless adults in the Home Relief program and a five-year lifetime limit for families' receiving Federal and state grants through Aid to Families With Dependent Children.

Throughout the debate over changing the welfare system, many advocates for the poor expressed concern that Assembly Democrats, particularly those from conservative upstate and suburban districts, would bow to election-year pressures and accept Mr. Pataki's proposals. But many expressed relief with the outcome.

"This was always a political debate, not one about truly moving people off welfare and into jobs," Robert Jaffe, a lobbyist for the Federation of Protestant Welfare Agencies, said. "In the end the Assembly was successful in rejecting proposals that would have driven poor people deeper into poverty."

SCHOOL AID

The accord provides an additional $346 million in aid to public schools, replacing all the Governor's cuts amid a steady outcry from parents, teachers and school administrators who feared that the cuts would have forced school districts to reduce services or increase taxes.

Mr. Pataki's original budget would have resulted in some districts' receiving more aid and others receiving less for general education. The plan also cut $242 million in financing for local districts, including New York City, for programs for disabled children, including special education courses in the summer and classes for the deaf and the blind.

"We believe that school districts will receive increases with this agreement, modest increases to be sure," the chairman of the Assembly Education Committee, Steven Sanders, said. "Too many district would have lost under the Governor's plan."

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Total state spending on public schools is $10.2 billion under this pact.

HIGHER EDUCATION

Mr. Pataki's proposal to cut financing for the State and City Universities ran into quick and stubborn opposition in the Republican-controlled Senate and the Assembly.

Under Mr. Pataki's plan, state aid would have been reduced by more than $200 million, potentially leading the two university systems to raise tuition by at least $250 a student per year. The plan would have also cut support for the Tuition Assistance Program by $100 million.

Mr. Silver and the Senate majority leader, Joseph L. Bruno, succeeded in restoring virtually all those cuts, avoiding the need for tuition increases this year and, thus, pacifying many constituents who had mobilized against the cuts.

But the final agreement did include Mr. Pataki's proposal to require students to maintain C averages to receive tuition assistance.

CRIMINAL JUSTICE

Legislative leaders blocked most of Mr. Pataki's plan for criminal justice, a centerpiece of his agenda for this legislative session. The plan had included ending parole for violent offenders, placing juvenile felons in adult prisons and giving prosecutors the right to appeal judges' bail and sentencing decisions.

But the leaders did develop a more modest package of bills. That included increasing penalties for several types of assault, fingerprinting juveniles who are charged with felonies and allowing the electronic monitoring of convicted felons on probation.

The leaders and Mr. Pataki also agreed to increase sentences for assaults involving gang violence, attacks that result in serious physical injuries and assaults on police officers, firefighters and emergency workers who are on duty. The agreement also calls for increased penalties for people who violate orders of protection by harassing, assaulting or stalking their victims.

The legislative leaders have also agreed to Mr. Pataki's proposal to make it more difficult for people who have fled police custody or are wanted on bench warrants to have their indictments dismissed under the so-called speedy trial law. Under that law, people charged with crimes are entitled to have their cases adjudicated within a certain period of time. The state's highest court has interpreted that provision to mean that charges could be dismissed, even in cases where the defendants themselves had caused court delays by fleeing the police. The leaders have agreed to a bill that would prevent people who have fled the police from invoking the speedy-trial argument.

Mr. Pataki succeeded in obtaining an agreement on a referendum for a $1.75 billion environmental bond issue to finance projects aimed at cleaning up drinking water and waterways, reducing air pollution and closing clogged landfills, including the Fresh Kills Landfill on Staten Island. Mr. Pataki also proposed a state research center for designing electric vehicles and money to begin converting New York City buses from diesel to less-polluting natural gas. The biggest single element would be a $625 million revolving-loan fund for municipalities to use to improve drinking water.

MENTAL HEALTH

Legislative leaders restored cuts to community-based mental-health programs. They also rejected Mr. Pataki's proposal to close the Kingsboro Psychiatric Center in Brooklyn.

Mr. Pataki had also called for reducing state spending on community mental-health programs by $62 million. But the leaders persuaded him to restore all of that money.

The state would also continue its policy of community reinvestment, under which savings from the closings of state psychiatric hospitals are used for community-based mental-health programs. Mr. Pataki had proposed ending that policy.

A version of this article appears in print on July 12, 1996, on Page B00005 of the National edition with the headline: After Standoff, Both Sides Can Take Credit for Victories. Order Reprints|Today's Paper|Subscribe